I’m a broiler grower in Monaghan with two houses supplying a processor. I’m confused with the new rules around VAT. With the flat-rate addition gone since September, we were told we didn’t have to register for VAT – but now I’m hearing that we do.In truth, I don’t know where I stand and want to make sure I have everything sorted for the year ahead. Am I now obliged to register? And what happens to the rest of the farm if I do?
ANSWER: You’re not the only one asking. Over the past few months, I’ve spoken to hundreds of broiler growers who are confused about the new rules around VAT and why the flat-rate has been removed.
The flat-rate addition (4.5%, rising to 5.1%) was designed to compensate unregistered farmers for VAT on inputs.
When the Department of Finance and Revenue reviewed the sector, they concluded that broiler farmers were not actually carrying most of the VAT cost. Because processors supply most inputs – feed, medicine, chicks and technical support – broiler farmers were found to incur far less VAT than the flat-rate was designed to compensate.
Under EU rules, once a sector is shown to be over-compensated, it cannot remain in the flat-rate scheme. So, the Minister signed the order removing broilers from the flat-rate from 1 September 2025.
That change alone does not force anyone into the VAT net.
Do broiler farmers have to register for VAT now? From 1 January 2026, every broiler grower whose broiler-related turnover exceeds the services threshold (€42,500) will be required to register for VAT. Most growers operate under a contract-rearing model, and Revenue generally treat this as the supply of an agricultural service – which is why the services threshold applies.
With two broiler houses, it is very unlikely you will remain under that €42,500 threshold.
If you exceed it, VAT registration becomes mandatory. If you are below it, registration remains optional.
So what happens if you register? Well, this is the part many farmers overlook. Once you register for VAT, your entire farming business enters the VAT net – not just the broiler unit. You cannot register the broilers only or the houses only. VAT attaches to you as the farmer, not to one part of the farm.
That means:
Your cattle, sheep, tillage, or any other farming activity also becomes VAT-taxable.Any non-farming business you run in your own name also enters the VAT net.You must charge VAT where appropriate and keep proper records for every part of the business.Some farmers benefit from this because they can reclaim VAT on inputs across the whole farm. Others find the extra complexity a burden. But the rule is absolute: you register the person, not the activity.
The only alternative is if the broiler activity operates through a separate legal entity which may avoid pulling the rest of the farm into VAT.
If the broiler unit is run through a company or partnership, and the rest of the farm is kept separate, then only the broiler business is pulled into VAT. But any restructuring must be planned carefully, as it has wider tax and legal implications.
What VAT registration means in practice:
You must issue VAT invoices correctly.You must file bi-monthly VAT returns.You must keep proper records for six years.You must charge the correct rate: most broiler services sit at 13.5%.You can reclaim VAT on electricity, repairs, building works, equipment, and so on.What about clawbacks?
This is where a lot of worry arises, so let’s clear it up. If you must register because you exceed the threshold, Revenue will not review ordinary inputs or seek a clawback if you later deregister. You were required to be registered, so there is no look-back review.
A clawback only arises under the Capital Goods Scheme (CGS) for buildings, major refurbishments and large plant, which have VAT lives of 10-20 years.
If the use of those assets changes from VAT-able to non-VAT-able, an adjustment may apply. This rule applies in every sector.
Outside of CGS, there is no clawback for a farmer whose registration was mandatory.
Cash basis or invoice basis?
Registered farmers must choose how they account for VAT.
Most prefer the cash basis, where VAT is only payable when the money actually lands in your account. This helps cashflow, especially in a system where processors sometimes pay on delayed cycles.
You may use the cash basis if:
Your turnover stays under
€2m, or;Less than 90% of your supplies are to VAT-registered customers.Most broiler farmers do not meet the 90% rule because processors are VAT-registered. Nearly all broiler farms fall under the €2m turnover limit, allowing the cash basis with no issue.
Alternatively, you will be on the invoice basis, where VAT becomes payable when you issue the invoice – even if payment hasn’t yet arrived. This can strain cashflow.
Broiler farms vary in scale and structure, so advice can prevent problems later.
Marty Murphy.
Marty Murphy is head of tax at ifac, the professional services firm for farming, food and agribusiness.
I’m a broiler grower in Monaghan with two houses supplying a processor. I’m confused with the new rules around VAT. With the flat-rate addition gone since September, we were told we didn’t have to register for VAT – but now I’m hearing that we do.In truth, I don’t know where I stand and want to make sure I have everything sorted for the year ahead. Am I now obliged to register? And what happens to the rest of the farm if I do?
ANSWER: You’re not the only one asking. Over the past few months, I’ve spoken to hundreds of broiler growers who are confused about the new rules around VAT and why the flat-rate has been removed.
The flat-rate addition (4.5%, rising to 5.1%) was designed to compensate unregistered farmers for VAT on inputs.
When the Department of Finance and Revenue reviewed the sector, they concluded that broiler farmers were not actually carrying most of the VAT cost. Because processors supply most inputs – feed, medicine, chicks and technical support – broiler farmers were found to incur far less VAT than the flat-rate was designed to compensate.
Under EU rules, once a sector is shown to be over-compensated, it cannot remain in the flat-rate scheme. So, the Minister signed the order removing broilers from the flat-rate from 1 September 2025.
That change alone does not force anyone into the VAT net.
Do broiler farmers have to register for VAT now? From 1 January 2026, every broiler grower whose broiler-related turnover exceeds the services threshold (€42,500) will be required to register for VAT. Most growers operate under a contract-rearing model, and Revenue generally treat this as the supply of an agricultural service – which is why the services threshold applies.
With two broiler houses, it is very unlikely you will remain under that €42,500 threshold.
If you exceed it, VAT registration becomes mandatory. If you are below it, registration remains optional.
So what happens if you register? Well, this is the part many farmers overlook. Once you register for VAT, your entire farming business enters the VAT net – not just the broiler unit. You cannot register the broilers only or the houses only. VAT attaches to you as the farmer, not to one part of the farm.
That means:
Your cattle, sheep, tillage, or any other farming activity also becomes VAT-taxable.Any non-farming business you run in your own name also enters the VAT net.You must charge VAT where appropriate and keep proper records for every part of the business.Some farmers benefit from this because they can reclaim VAT on inputs across the whole farm. Others find the extra complexity a burden. But the rule is absolute: you register the person, not the activity.
The only alternative is if the broiler activity operates through a separate legal entity which may avoid pulling the rest of the farm into VAT.
If the broiler unit is run through a company or partnership, and the rest of the farm is kept separate, then only the broiler business is pulled into VAT. But any restructuring must be planned carefully, as it has wider tax and legal implications.
What VAT registration means in practice:
You must issue VAT invoices correctly.You must file bi-monthly VAT returns.You must keep proper records for six years.You must charge the correct rate: most broiler services sit at 13.5%.You can reclaim VAT on electricity, repairs, building works, equipment, and so on.What about clawbacks?
This is where a lot of worry arises, so let’s clear it up. If you must register because you exceed the threshold, Revenue will not review ordinary inputs or seek a clawback if you later deregister. You were required to be registered, so there is no look-back review.
A clawback only arises under the Capital Goods Scheme (CGS) for buildings, major refurbishments and large plant, which have VAT lives of 10-20 years.
If the use of those assets changes from VAT-able to non-VAT-able, an adjustment may apply. This rule applies in every sector.
Outside of CGS, there is no clawback for a farmer whose registration was mandatory.
Cash basis or invoice basis?
Registered farmers must choose how they account for VAT.
Most prefer the cash basis, where VAT is only payable when the money actually lands in your account. This helps cashflow, especially in a system where processors sometimes pay on delayed cycles.
You may use the cash basis if:
Your turnover stays under
€2m, or;Less than 90% of your supplies are to VAT-registered customers.Most broiler farmers do not meet the 90% rule because processors are VAT-registered. Nearly all broiler farms fall under the €2m turnover limit, allowing the cash basis with no issue.
Alternatively, you will be on the invoice basis, where VAT becomes payable when you issue the invoice – even if payment hasn’t yet arrived. This can strain cashflow.
Broiler farms vary in scale and structure, so advice can prevent problems later.
Marty Murphy.
Marty Murphy is head of tax at ifac, the professional services firm for farming, food and agribusiness.
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